Are we heading toward a comparably powerful period of stagflation?

An economic environment consisting of low growth, high unemployment and continuously rising prices is defined as a period of stagflation. While the current environment consists of higher prices, fewer workers, parts shortages, and challenging global distribution channels resulting in multi-decade high rates of inflation, we are also starting to see households quickly switch from discretionary spending to mandatory non-discretionary spending on items like groceries, housing, taxes, and debt. This in turn can lead to a lower economic growth, higher unemployment, and lingering high prices, the conditions that mark stagflation.

According to the world gold council, “from Q1 1973 to Q2 2021, the top performers during periods of stagflation have been defensive assets and real assets, in particular gold, while equities have suffered the most followed by a mixed performance from fixed income.”

With equities currently getting trounced (according to MarketWatch the DOW is down more than 8.91 percent for the year, the S&P 500 is down more than 13.2 percent, and the Nasdaq down a stinging 22.5 percent), safe-haven assets like gold and silver may be a sensible diversifier for now, and in the long run.


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Staff Writers. (2021) “Investment Update: Stagflation rears its ugly head.” Retrieved from: